UPDATE: This bill was amended and approved by the Assembly Transportation and Independent Authorities Committee on Thursday, September 22. This bill will require the State Department of Transportation to compensate local governments for delay damages on transportation projects that result from Executive Order 210. Further, as amended by the Committee, the bill permits local governments to use their own funds to continue or complete a project that was halted as a result of the Executive Order, and prohibits the DOT or any Executive Branch agency from withholding , revoking or canceling funds if the local government chose to proceed.
The League of Municipalities supports A-4114, which would protect local governments from any increased costs resulting from the State’s stop-work order on any transportation infrastructure projects funded by the Transportation Trust Fund (TTF). This bill is scheduled for consideration by the Assembly Transportation and Independent Authorities Committee on Thursday, September 22.
As the sponsor has said, this proposal will “require the Department of Transportation (DOT) to consider shutdown related delay damages realized by local governing entities on transportation projects supported through the local aid program to be compensable delays. As such, these delay damages would be paid by the State DOT rather than by property taxes raised at the local level.”
Recent events, unfortunately, now require the remedy sought in A-4114. As we await a final legislative solution to a long-term, sustained funding source for the State Transportation Trust Fund (TTF), local governments, and by extension, New Jersey’s property taxpayers should not bear the burden of the ongoing impasse.
By way of background, municipal budget and contracting processes are different from the State’s processes. For example, the State typically has in its contract a provision that future payments would be “subject to future appropriation.” Municipal contracts do not include this language, but will typically include language that the funds are available in a specific account as municipalities cannot award contracts unless the Chief Finance Officer has certified the availability of funds. Local governments have entered into contracts based upon that certification from the State.
Public confidence in government is enhanced when the level and branch of government that issues an order resulting in increased costs to local taxpayers recognizes its obligation to account for those costs.